Page 19 - California Home Buyers Handbook

Mello-Roos (California Only)
It is possible that the property you are buying is in a “Mello-Roos District” and that a special tax will apply.
Mello-Roos is the common name for the 1982 Community Facilities District Act. This Act authorizes local governments
and developers to create Community Facilities Districts (”CFDs”) for the purpose of selling tax exempt bonds to fund
public improvements (such as streets, water, sewage and drainage, electricity, infrastructure, schools, parks and police
protection). Property owners that participate in a CFD pay a special tax to
repay the bonds.
The Mello-Roos tax stays in effect until the bonds are paid off. Sometimes after the bonds are paid off, a CFD
will continue to charge a reduced fee to maintain the improvements. This tax is typically included in the annual
county property tax bill, and is subject to the same penalties that apply to regular property taxes. If the Mello-
Roos tax is not paid, the District may exercise its legal right to foreclose and sell the property.
Under Proposition 13, Mello-Roos taxes are not based on the value of the property. Instead, they are apportioned by tak-
ing into account property characteristics (e.g., the use of the property, square footage of the structure, and lot size). The
District submits the tax charges to the County, who adds them to your annual Property
Tax Bill. Charges for this tax vary, but they do not exceed the maximum amount specified when the CFD was
created. When there is a new purchase of a house in a subdivision, the maximum of the tax will be specified in
the public report.
Supplemental Tax (applicable in select States)
In California, when there is a change in ownership of real property or when new construction is completed, the
County Assessor will appraise the property changing ownership, or the new construction at its full cash value
as of the date the change in ownership occurs or the new construction is completed.* The appraised value then becomes
the new base year value for the property.
There may be one or two supplemental assessments made depending on the date when the change in ownership takes
place or when the new construction is completed.
If the change in ownership occurs, or the new construction is completed after January 1, but before May 31,
there will be two supplemental assessments. The first assessment is the difference between the new base year
value and the taxable value on the current roll. The second assessment will vary depending on the triggering
event.
For new construction, the second assessment is the value change due to the new construction. For a change
in ownership of a full ownership interest, the second assessment is the difference between the new base year
value and the taxable value to be enrolled on the roll being prepared. For a change of a partial ownership interest, the sec-
ond assessment is the difference between the total of the new base year value for the interest conveyed, plus the taxable
value of the rest of the property on the roll being prepared, and the taxable value of the
entire property on the roll being prepared.
If the change in ownership occurs, or the new construction is completed on or after June 1, but before the
following January 1, there will be one supplemental assessment made for the difference between the new base
year value and the taxable value on the current roll.

*Certain property and transfers may be exempt from reappraisal for supplemental taxes.

TAX CALENDAR
Tax Bills Mailed
Last Week of
October
2nd Installment 1st Installment
Lien Date Delinquent Delinquent
January 1st After April 10 After December 10

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC
2nd Installment Due Beginning of 1st Installment Due
February 1st Fiscal Tax Year
July 1st November 1st
2nd Installment 1st Installment
January 1-June 30 July 1-Decmber 31

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